Traditionally Chinese people have bought bullion to beat inflation: putting their gold bars beneath their pillows in troubled times is seen as a wise investment move.

With inflation and world tensions on the rise so is the allure of the sparkling metal and other hedges against increasing prices. For example the Hong Kong government is planning to launch an inflationary linked bond in July.

A recent survey by Barclays Capital, however, shows inflation-linked bonds and gold are not always the favoured choice for Asian and Hong Kong investors.

Some wealthy Asian investors believe equities are the best tool to hedge their risks, according to the survey of 129 private bankers and asset managers in nine Asian countries, who manage combined assets of more than US$5 trillion.

The survey showed 70 per cent of Hong Kong respondents found investors either fully use or substantially use equities as the best anti-inflation investment hedge. This is in line with the overall Asian survey result.

Gold - the traditional king of anti-inflation products - ranked the second most popular choice. In Hong Kong, 54 per cent of respondents said they fully used or substantially used gold to fight inflation. Thirty five per cent choose other commodities to hedge against inflation.

Only 17 per cent said Asian inflationary linked bonds were what they used in full or substantially to beat inflation. US and UK Treasury Inflation-Protection securities (TIPS) ranked at the bottom of the list, with only 6 per cent saying they use these instruments in full or substantially to hedge against inflation.

In Hong Kong, 12 per cent of Hong Kong respondents said they had no demand for TIPS and 9 per cent said there was no need to use similar products in Asia.

Asian inflationary linked bonds are similar in that they are bond products issued by the government with interest payments linked to the consumer price index. In the US, TIPS have maturities from five to 30 years.

Financial Secretary John Tsang Chun-wah has said the government would like to launch up to HK$10 billion worth of inflationary linked bonds at a three-year term in July with the intention of making a new product to hedge against inflation available to the public. Mr Tsang may need to rethink his plan after reading this survey result.

However, are investors really opting for the best products to beat inflation?

Both stocks and gold and many commodities beat inflation in Hong Kong last year, which stood at 2.4 per cent and is expected to reach 4.5 per cent this year.

But gold investors would be better off than those who bought stocks, according to the Hang Seng Index. Gold prices rose 28 per cent last year, beating the Hang Seng Index, which only gained 5 per cent last year.

Barclays' survey indicates wealth managers still advise investors to take a balanced approach: they should invest only 7 per cent in commodities and 40 per cent in global market equities in the next six months - including 16 per cent in Asia excluding Japan, 10 per cent in US equity, 6 per cent in European equity, 5 per cent in emerging markets and 3 per cent in Japan.

The rest should be invested in bonds, foreign currencies and hedge funds. The survey did not mention property, also a popular and successful hedge against inflation in Hong Kong.